Big Debate on Collective Investment Scheme Taxation

National Treasury has assured the collective investment scheme (CIS) industry that it will not make any "rash" decisions that will harm the savings industry in South Africa.

- Amanda Visser

The assurance follows the publication of a discussion document on the tax treatment of collective investment schemes at the end of last year.

The document raised grave concerns about the "disastrous impact" the proposal will have on the saving culture and market liquidity.

According to the 2023 World Bank Development Indicators, South Africa's savings rate is 13.6% of GDP.

Treasury recognises the concerns relating to the negative impact on market liquidity and the weak savings culture in SA.

It held a workshop on Friday where industry players - including the Banking Association of SA, the Association for Savings and Investments, tax lawyers and fund managers - voiced their deep anxiety about the unintended consequences stemming from the proposals.

Treasury allayed some of the fears by stating categorically that it is only a discussion document and not legislation.